Edmunds.com Looks Back at 2007 and Forecasts 2008 Automotive Trends

Edmunds.com Looks Back at 2007 and Forecasts 2008 Automotive Trends


Edmunds.com Looks Back at 2007 and Forecasts 2008 Automotive Trends

SANTA MONICA, Calif. — December 27, 2007 — Edmunds.com, the premier resource for automotive information, has compiled lists of the new cars and trucks most researched in 2007 by the 13 million Edmunds.com monthly visitors.

The most-researched cars are:

Rank Make Model
1 Honda Civic
2 Honda Accord
3 Toyota Camry
4 BMW 3 Series
5 Nissan Altima
6 Mazda MAZDA3
7 Infiniti G35
8 Toyota Prius
9 Toyota Corolla
10 Acura TL

The most-researched minivans, SUVs and trucks are:

Rank Make Model
1 Honda CR-V
2 Toyota RAV4
3 Toyota Tacoma
4 Honda Odyssey
5 GMC Acadia
6 Honda Pilot
7 Toyota Tundra
8 Toyota Highlander
9 Acura MDX
10 Saturn VUE

Despite many recent new product introductions, most of the vehicles on the lists were also among the most researched in 2006. Newcomers to the 2007 list are the Acura MDX, Nissan Altima, Toyota Prius and Toyota Tundra, which were redesigned for 2007, and the GMC Acadia and Saturn VUE, two new vehicles introduced this year. No longer in the top ten are the Chevrolet Tahoe, Toyota 4Runner, Toyota FJ Cruiser, Toyota Sienna, Toyota Yaris and Volkswagen Jetta.; however, each vehicle stayed within the top twenty-five most-researched vehicles of 2007 in their respective category.

2007 Automotive Trends Spotted by Edmunds.com(Note: All data reflects activity between January 1 and November 30 of the indicated year.)

Macroeconomic Issues Affected Auto Sales Gas prices continued to top $3.00 in 2007 and many consumers were also hit hard by the unexpected housing market and credit crises. As a result, overall car sales declined in 2007. Some interesting points follow:

  • Compact car sales increased 2.4 percent and compact SUV sales increased 5.8 percent compared to last year as consumers sought more fuel-efficient vehicles. It took an average of 57 days to sell each vehicle in the compact car segment upon arrival at dealerships, while the compact SUV segment averaged 67 "days to turn." The industry average was 64 days to turn in 2007 and 63 days to turn in 2006.
  • Hybrid market share increased 61.5 percent compared to last year, mainly because sales of the Toyota Prius increased by 71 percent.
  • Of the traditional segments, the largest increase in market share was achieved by the compact cars, which grew from 17.5 percent in 2006 to 18.4 percent in 2007. The biggest decrease in market share was experienced by the minivan segment, which fell from 5.1 percent in 2006 to 4.1 percent in 2007.

Domestics Lost Market Share Chrysler, Ford and General Motors (GM) continue to feel the heat of import automakers. For example:

  • Domestic manufacturers' market share dropped from 55.2 percentage in 2006 to 52.3 percentage in 2007.
  • Each of the three domestic manufacturers experienced a loss of market share: Chrysler's market share dipped from 12.9 percent to 12.8 percent; Ford's fell from 17.4 percent to 15.6 percent; and GM's slipped from 24.8 percent to 23.9 percent.
  • The Japanese automakers are the greatest beneficiaries of the market share shift. Honda's market share grew from 9.1 percent to 9.7 percent; Nissan's rose from 6.2 percent to 6.7 percent and Toyota's climbed from 15.3 percent to 16.3 percent, respectively. Toyota's sales outpaced Chrysler's all year and surpassed Ford's every month since May.

Overall Incentive Spending was Flat Incentive spending was essentially flat for domestic, Japanese and Korean automakers, while European automakers continue to be more aggressive than they were in the past. Specifically:

  • In 2007, domestic automakers spent $3,208 per vehicle sold, down from $3,254 in 2006.
  • In 2007, Japanese automakers spent $1,193 per vehicle sold, up from $1,150 in 2006.
  • In 2007, Korean automakers spent $1,777 per vehicle sold, flat compared with $1,775 in 2006.
  • In 2007, European automakers spent nearly $2,814 per vehicle sold, up over 5 percent from $2,676 per vehicle sold in 2006.
True Cost of IncentivesSM *
Manufacturer 2006 2007
Chrysler $3,796 $3,812
Ford $3,410 $3,105
GM $2,896 $2,975
Honda $738 $1,104
Nissan $2,314 $2,049
Toyota $838 $832

* Edmunds.com's monthly True Cost of IncentivesSM (TCISM) report takes into account all of the manufacturers' various United States incentives programs, including subvented interest rates and lease programs as well as cash rebates to consumers and dealers. To ensure the greatest possible accuracy, Edmunds.com bases its calculations on sales volume, including the mix of vehicle makes and models for each month, as well as on the proportion of vehicles for which each type of incentive was used.

2008 Automotive Trends Forecasted by Edmunds.comEdmunds.com expects light vehicle sales to be down in 2008, with sales dropping to 15.9 million units from approximately 16.15 million units in 2007.

"Gas prices and the housing market will continue to help determine what type of vehicles — and how many of them — consumers will purchase in 2008," said Jesse Toprak, Executive Director of Industry Analysis for Edmunds.com. "With many of next year's macroeconomic concerns already obvious to us, we believe it will be one of the slowest years for auto sales in nearly a decade."

Edmunds.com also expects that:

  • New and redesigned models for 2008 will bring consumers to showrooms. Some of the hottest vehicles of the year include: Acura TL, Acura TSX, Audi A4, BMW 1 Series, Cadillac BRV, Chrysler 300, Dodge Ram 1500, Ford F-150, Ford Flex, Lincoln MKS, Mitsubishi Lancer Evolution X, Nissan GT-R, Pontiac Solstice, Pontiac Vibe, Toyota Corolla, Toyota Prius and Toyota Matrix.
  • Sales of compact cars, compact SUVs and crossover vehicles will gain market share as consumers continue to seek better fuel economy.
  • Hybrid and diesel vehicles will continue to grow in popularity, especially given new product introductions such as the Audi Q7, Cadillac Escalade Hybrid, Chevrolet Silverado Hybrid and Volkswagen Jetta BlueTec.
  • European and Japanese automakers will increase incentives while domestic automakers' incentives will be similar to 2007 levels. Incentives from the Korean automakers will be similar to 2006 and 2007 levels.
  • Leasing will stay steady at around 18 percent of total new vehicle transactions, with luxury manufacturers leasing the largest share.
  • Certified pre-owned vehicle sales will rise as consumers will look to spend less and seek a greater sense of security in their next used vehicle purchase.
  • Consumers will increasingly owe more on their car loans than their cars are worth. Of those who bought new cars in 2007 and traded in a used vehicle, 25.6 percent had negative equity in their trade-in. The average amount "upside down" was $4,059, the highest negative equity average on record.
  • In the used car market, compact car resale values will continue to be strong in 2008 while the midsize and large SUV segment will be hurt.

"As in 2007, next year will be a buyers' market for most large vehicles and a sellers' market for the industry's most fuel-efficient vehicles," said Joe Spina, Senior Remarketing Manager for Edmunds.com. "But those hybrid SUVs that cost a lot more than their non-hybrid counterpart will not sell as well."

About Edmunds
Edmunds publishes four Web sites that empower, engage and educate automotive consumers, enthusiasts and insiders. Edmunds.com, the premier online resource for automotive consumer information, launched in 1995 as the first automotive information Web site. Its most popular feature, the Edmunds.com True Market Value®, is relied upon by millions of people seeking current transaction prices for new and used vehicles. Edmunds.com was named "Best Car Research Site" by Forbes ASAP, has been selected by consumers as the "Most Useful Web Site" according to every J.D. Power and Associates New Autoshopper.com Study(SM), was ranked first in the Survey of Car-Shopping Web Sites by The Wall Street Journal and was rated "#1" in Keynote's study of third-party automotive Web sites. Inside Line launched in 2005 and is the most-read automotive enthusiast Web site. CarSpace launched in 2006 and is an automotive social networking Web site and home to the oldest and most established automotive community. AutoObserver.com launched in 2007 and provides insightful automotive industry commentary and analysis. Edmunds is headquartered in Santa Monica, California, and maintains a satellite office in suburban Detroit.

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